This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at [email protected]
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
Pradhan Mantri Suraksha Bima Yojana (PMSBY)
88% of India’s total labour force of 47.29 crore belongs to the unorganised sector, in which the workers do not have any formal provision of getting a regular pension payment on retirement. Moreover, due to increasing labour wages and better medical facilities, these people also face a risk of increasing longevity. So, this work force would require some kind of assured income guarantee to sustain itself in the coming years.
Launching Atal Pension Yojana (APY) from June 1, 2015
To encourage workers in the unorganised sector to voluntarily save for their retirement, the government of India will be launching a new scheme, called Atal Pension Yojana (APY), from 1st June, 2015. Finance Minister Arun Jaitley announced this scheme in his budget speech on February 28th.
This scheme will replace the UPA government’s Swavalamban Yojana – NPS Lite and will be administered by the Pension Fund Regulatory and Development Authority (PFRDA). The benefits of this scheme in terms of fixed pension will be guaranteed by the government and the government will also make contribution to these accounts on behalf of its subscribers.
Under this scheme, a subscriber would receive a minimum fixed pension of Rs. 1,000 per month and in multiples of Rs. 1,000 per month thereafter, up to a maximum of Rs. 5,000 per month, depending on the subscriber’s contribution, which itself would vary on the age of joining this scheme.
The minimum age of joining this scheme is 18 years and maximum age is 40 years. Pension payment will start at the age of 60 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.
The Central Government would also co-contribute 50% of the subscriber’s contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years, i.e., from 2015-16 to 2019-20, who join the NPS before 31st December, 2015 and who are not income tax payers. The existing subscribers of Swavalamban Scheme would be automatically migrated to APY, unless they opt out.
Who is eligible for Atal Pension Yojana?
Any Citizen of India, aged between 18 years and 40 years, who has his/her savings bank account opened and also possesses a mobile number, would be eligible to subscribe to this scheme.
Government Funding – Indian Government would provide (i) fixed pension guarantee for the subscribers; (ii) would co-contribute 50% of the subscriber contribution or Rs. 1,000 per annum, whichever is lower, to eligible subscribers; and (iii) would also reimburse the promotional and development activities including incentive to the contribution collection agencies to encourage people to join the APY.
Who is eligible for Government Co-Contribution in Atal Pension Yojana?
Subscribers of this scheme, who are not covered under any other statutory social security scheme and are not income tax payers, would be eligible for the government’s co-contribution of up to Rs. 1,000 per annum.
Social Security Schemes which are not eligible for Government Co-Contribution
- Employees’ Provident Fund (EPF) & Miscellaneous Provision Act, 1952
- The Coal Mines Provident Fund and Miscellaneous Provision Act, 1948
- Assam Tea PlantationProvident Fund and Miscellaneous Provision, 1955
- Seamens’ Provident Fund Act, 1966
- Jammu Kashmir Employees’ Provident Fund & Miscellaneous Provision Act, 1961
- Any other statutory social security scheme
Minimum/Maximum Pension Payable – This scheme will pay a minimum pension of Rs. 1,000 per month and a maximum pension of Rs. 5,000 per month, depending on the subscriber’s own contribution per month.
Minimum/Maximum Period of Contribution – As the minimum age of joining APY is 18 years and maximum age is 40 years, minimum period of contribution by the subscriber under this scheme would be 20 years and maximum period of contribution would be 42 years.
Atal Pension Yojana – Contribution Period, Contribution Levels, Fixed Monthly Pension and Return of Corpus to the Nominees of Subscribers
Internal Rate of Return (IRR) – Thanks to the government funding of Rs. 1,000 per annum per subscriber account for 5 years, your account would generate an IRR of approximately 0.66% per month or 8% per annum. This pension amount per month is fixed and the government has made it clear that if the actual returns on the pension contributions are higher than the assumed returns, such excess return will be credited to the subscribers’ accounts, resulting in enhanced pension payment to the subscribers.
Minimum Contribution – A subscriber aged 18 years will have to contribute a minimum of Rs. 42 per month in order to get Rs. 1,000 pension per month starting 60 years of age. For a 40 years old subscriber, his/her minimum contribution would be Rs. 291 per month. The contribution levels would vary and would be low if subscriber joins early and increase if he joins late.
Maximum Contribution – A subscriber aged 40 years will have to contribute Rs. 1,454 per month in order to get Rs. 5,000 pension per month starting 60 years of age. For a 18 years old subscriber, his/her contribution for Rs. 5,000 monthly pension would be Rs. 210 per month.
Can I increase or decrease my monthly contribution for higher or lower pension amount?
The subscribers can opt to decrease or increase pension amount during the course of accumulation phase, as per the available monthly pension amounts. However, the switching option shall be provided only once in a year during the month of April.
What will happen if sufficient amount is not maintained in the savings bank account for contribution on the due date?
Non-maintenance of required balance in the savings bank account for contribution on the specified date will be considered as default. Banks are required to collect additional amount for delayed payments, such amount will vary from minimum Re. 1 to Rs. 10 per month as shown below:
(i) Re. 1 per month for contribution upto Rs. 100 per month
(ii) Rs. 2 per month for contribution upto Rs. 101 to 500 per month
(iii) Rs. 5 per month for contribution between Rs. 501 to 1,000 per month
(iv) Rs. 10 per month for contribution beyond Rs. 1,001 per month.
Discontinuation of payments of contribution amount shall lead to following:
After 6 months account will be frozen.
After 12 months account will be deactivated.
After 24 months account will be closed.
Subscriber should ensure that the Bank account to be funded enough for auto debit of contribution amount. The fixed amount of interest/penalty will remain as part of the pension corpus of the subscriber.
Post-Retirement Rate of Return – Considering a retirement corpus of Rs. 1.7 lakh and monthly pension of Rs. 1,000, this scheme is going to generate a return of 0.59% per month or 7.1% per annum for its subscribers. I think this return is also on a lower side.
Nomination Facility – This scheme will also provide the nomination facility to its subscribers. In case of the subscriber’s death after attaining 60 years of age, the whole corpus generating the pension income to the subscriber would be returned back to the nominee of the subscriber. In case of untimely death of the subscriber before 60 years of age, the balance would be returned back to the nominee of the subscriber.
Where to open APY Accounts – You need to approach points of presence (PoPs) and aggregators under existing Swavalamban Scheme. These agencies would enrol you through architecture of National Pension System (NPS).
Points of Presence & Aggregators
Application Form – Here you have the links to the application form for subscribing to Atal Pension Yojana – Application Form in English – Application Form in Hindi
I think a subscriber should opt for a minimum monthly contribution of around Rs. 167 or so, which would make it approximately Rs. 2,000 annual contribution. 50% of Rs. 2,000 i.e. Rs. 1,000 would be contributed by the government as well. So, the subscriber will get the maximum benefit of government funding.
As mentioned above, the scheme would start from June 1, 2015. So, interested people will have to wait till then to open an account. If you have any other query regarding this scheme, please share it here.
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
Sir,
I currently in the ADAl scheme. May i open the P.F account in my company. It is compulsorily in my company. HOW CAN I CLOSE MY ADAL YOJANA POLICY.
Your account will mature as you turn 60 years of age.
sir
1) Maine toll free number pe call kiya to unhone bataya ki pension ka amount mujhe aur mere wife ko milega. par jo corpus amount 850000 hai wo hamare bachche ko milega aisa koi confirmation nahi hai.
unke hisab se deposit money ka sirf pension milega jab tak husband aur wife jeevit hai.
2) agar main 65 age me death kar jata hu aur meri wife pension na lekar corpus amount lena chahe to kya aisa ho sakta hai?
Hi Sanjay,
1. Deposit money ka pension milega jab tak husband aur wife jeevit hain aur unke baad unke nominee ko corpus amount milega. Ye confirmed hai.
2. Nahin ho sakta. Corpus amount nominee ko hi milega.
Dear Sir,
One of our family member is working in unorganized sector. If she apply for APY and later on get any govt job, whether she will be allowed to continue with the scheme or not. In this case, she will not meet the eligibility conditions of the scheme (not assessed to IT/not a member of social security scheme). What will happen to the funds deposited in the scheme.
Once she joins the govt job, her account will stop getting the government contribution and run as usual.
I am tax payers & my wife is not yet she can get govment contributing facility of 1000 / annum
I am tax payers & have government job under nps can I join npy and my wife is housewife she also join apy?
Every Indian citizen is eligible for this scheme. In your case, you are not eligible for the government contribution and if your wife is not a tax payer and also not covered under any other social security scheme, then she is eligible for the government contribution.
Hi Sir,
In below lines I want to know:
“Only the first bank account holder can apply for this scheme. The other account holder will have to apply from some other bank account??”
Is it possible to apply for APY by Second Joint account holder, bcz she does not have any other bank account instead of this joint account.
And Can I open APY in my other individual Bank account.
Hi Ranjeet,
The second account holder will have to open another account in which she is the primary/first account holder.
pl.let me know how i can become agent/aggregator fo procuring atal pension yojana business
I have no idea about it, you need to contact PFRDA for the same.
Am govt employee. Am eligible for this scheme?
Yes, you are eligible. But, you will not get the government contribution of up to Rs. 1,000 per month.
8.5 lakh at retirement — I will get this corpus + 5k per month as pension or just 5k per month if i dont withdraw that corpus ?
I am 23 yr old
Hi Vipin,
You’ll get only the pension amount of Rs. 5,000 per month. Rs. 8.5 lakh belongs to you only, but your nominee will get it after you. You will not get the corpus amount.
Is this apy scheme available in post offices?
No Rama, post offices are not opening these accounts.
Thnq sir
Sir.. What is the process for canceling the APY form??
Hi Tilkesh,
You need to check it with your bank or POP-SP.
Sir,we want join our maid in this apy scheme ,after completing 60 years will she get the total amount+Monthly pension r she will get only monthly pension…… N if she failed to pay in the middle will she get the amount which she already paid
Hi Rama,
After 60 years, she will get the pension amount. After she passes away, her husband will get the pension amount. After both of them, her nominee will get the corpus amount. She cannot withdraw the balance before 60 years of age.
Thnq sir
You are welcome Rama!
This is very helffull plan.
I am already in NPS-regular and income tax payee, am I eligible for Atal Pension Yojana?
which one is better?
Hi Mr. Babu,
You are not eligible for the government contribution of up to Rs. 1,000 per annum.
can I join APY, along with continuing my NPS-regular account both.
Sir,
How I can transfer 20000 Rs in NPS presently to ATAL PNSION YOJANA
I have both the schemes with me
is there any migration form for the same
Thanks
Hi Santosh,
Only the NPS-Lite account can be migrated to APY.
Hi Sir,
I am having 2 doubts–>
About 2 years before my husband has opened one account(before our marriage)
and last year after our marriage, he converted his account as a joint account(for we both).
1)Now just I want to ask the can we both open this PM Pension Scheme using this joint account, in future we will not have any problem naa in getting benefits from this scheme.
2)or suppose I only wish to use this joint account for this PM Pension Scheme then can I go with this joint account.
Thanks alot in Advance
Hi Jyoti,
Only the primary bank account holder can get his/her bank account linked to this scheme.
Sir,
My wife is 30yr old..if i opened APY in her name,after 60 she is eligible for pension..after her death i will get pension or not??or Nominee will get corpus only..
I have opened APY in my name..after my death wife will get pension after 60yrs..
what abt if i opened APY in wife name?after 60yrs if she dies then i will get pension or not?we are planning for 10000rs pension..so openening account for both?is it possible
Hi Saju,
1. After you wife, you’ll get the pension amount paid.
2. It is possible to get this account opened in your individual names and get Rs. 10,000 pension in the absence of the other partner.
Sir ,
I am a 23 year old student.
I would be completing my studies next year . I am not paying the income tax as I dont earn right now bt I have applied for the pan card.
Next year I would be doing job.
Can I apply for this pension scheme
Yes, you can apply for this scheme.
seva me,
shriman pradhanmantriji,
aap ke dwara chalai gai yojna, atal pention yojna bahut acchi yojna hai. mananiy ji se nivedan hai ki meri umar 43 year ho chuki hai. aurmere pas koi sarkari naukri nahone ke kaaran mai is yojna ka labh lena chahta hu. kyun ki aap ne is yojna ko 40 year tak hi kiya hai. isliye hamari umar ke log is yojna ka labh nahi utha pa rahe hai.
atah aapse niwedan hai ki is yojna ki umar ko badane ka kashat kare . is ke liye premium amount bhi umar ke hisab se badane ka kashat kare.
atah shrimanji se niwedan hai ki is samasya par vishes prakash dale kyu ki hume bhi vote dene ka adhikar hai. aur main bharat ka nagrik hu.
aap ka bhaoudhi
ved prakash singh
5/123 vikas khand
gomti nagar (226010)
lucknow (u.p)
cont. 9450024012
dear sir,
kindly saggest can i apply the apy online
No, you cannot apply for this scheme online as yet.